A Billings man’s attempt to compel the city of Billings and its insurer to release all information relating to a $1.6 million judgment paid to a former police officer has been rejected by the Montana Supreme Court.
In an opinion issued Wednesday, six members of the court upheld Yellowstone County District Judge Michael Moses’ summary judgment in favor of the city and its insurer, the Montana Municipal Interlocal Authority.
Kevin Nelson, who had petitioned the District Court for the information and appealed Moses’ decision to the Supreme Court, without benefit of a lawyer, said Friday that he wasn’t entirely disappointed with the opinion.
That is because one justice, Laurie McKinnon, added a 17-page statement to the 25-page opinion, saying she concurred with the court’s conclusion but found its analysis to be “significantly flawed.” She said the high court went too far in exempting attorney-client communications from the state’s constitutional right to know.
In the course of her statement, McKinnon noted the importance of the court’s decision by referencing the recently revealed payout of $130,000 to a porn star “to keep quiet about an alleged on-again, off-again affair between herself and Donald Trump.” If a similar case happened in Montana, she said, under the state Supreme Court’s ruling the public would have no right to learn any details of such a transaction.
Nelson, who was the first recipient of the Making Democracy Work Award from the League of Women Voters of Billings in 2014, said he looked forward to asking the 2019 Legislature to make some important clarifications in regard to Montanans’ constitutional right to know.
After reading the high court opinion and McKinnon’s statement, Nelson said, “I think there’s still some ground to plow on this whole attorney-client privilege thing.”
The case goes back to 2006, when former police officer Steven Feuerstein sued the city and the Billings Police Department, saying they had violated employment laws and his state and federal civil rights to free speech.
After he reported the mishandling of illegal drugs within the department’s K-9 unit, Feuerstein claimed in his lawsuit, he was passed over for promotion, denied special-duty assignments and subjected to retaliation. A jury ultimately awarded him $1.3 million, and the total cost to the city rose to $1.6 million with court costs and attorney fees added on.
The MMIA, an interlocal government agency that provides insurance coverage to the city, paid the full amount to Feuerstein, but the agency later determined that the city’s policy didn’t cover certain portions of the judgment, and it sought a $900,000 reimbursement from the city.
In 2009, the City Council and city officials met with MMIA officials in a session closed to the public, prompting the Billings Gazette to file a suit of its own. A District Court judge issued a preliminary injunction prohibiting further secret meetings on the subject, but the case was dismissed as moot when the city and the MMIA agreed to have no further discussions.
The MMIA later sued the city and its reinsurer, Specialty National, for reimbursement. In the course of that litigation, Nelson claimed, the city held closed meetings — in violation of the Montana Constitution and the state open-meeting law — to discuss litigation strategy.
The city and the MMIA ultimately reached an settlement under which the city agreed to pay MMIA $500,000 to end the lawsuit.
Nelson then made information requests to the MMIA and to the city, asking to see “all documents” and information related to the settlement, in both cases saying he was willing to pay up to $50 for copying and postage fees. He was told some of the information might be privileged, that is, private, and that costs of reviewing, copying and mailing the documents would far exceed $50. The city and the MMIA, the high court opinion says, didn’t hear back from Nelson after that.
On July 23, 2014, Nelson filed a petition in District Court, asking for the release of “everything” the MMIA and the city had that was related to Feuerstein settlement. He also asked Judge Moses to determine whether the meeting closures to discuss litigation violated the constitution.
Eventually, the city and the MMIA gave Nelson more than 7,000 pages of partially redacted documents, as well as a “privilege log” detailing which documents were withheld. The MMIA and the city then moved for summary judgment, and after a hearing it was granted, dismissing Nelson’s petition. (Nelson said he was initially billed almost $12,000 for the documents but ended up paying $1,500.)
In the Supreme Court opinion issued Wednesday and written by Justice Beth Baker, the high court said Nelson’s appeal presented the court with a question it had never dealt with before: “whether any privileges protected by statute or common law at the time of adoption survived enactment of the 1972 Constitution.”
At issue was the interpretation of Article II, Section 9 of the Montana Constitution, which reads: “No person shall be deprived of the right to examine documents or to observe the deliberations of all public bodies or agencies of state government and its subdivisions, except in cases in which the demand of individual privacy clearly exceeds the merits of public disclosure.”
After a lengthy review of minutes of the Constitutional Convention and related case law, Baker quoted a federal decision that called the attorney-client privilege “the oldest of the privileges for confidential communications known to common law.”
Likewise, her opinion says, “the attorney-work-product privilege,” though not as well established as attorney-client privilege, “has a long history in this country.”
Baker also wrote that “Attorney-client and attorney-work-product privileges are integral to the operation of our legal system and encourage an attorney’s candid advice to prevent or resolve disputes,” and the “inviolate nature of these privileges is a cornerstone of our judicial system.”
Speaking of those who wrote the 1972 constitution, she continued: “It is not reasonable to conclude that the Framers intended to eliminate these privileges for public bodies in Montana without a single acknowledgment of such an intention during the convention debates.”
As a result, she said, “we hold that documents protected by the attorney-client or attorney-work-product privileges are not subject to disclosure under Article II, Section 9.”
Baker said a government agency asserting such privileges has the burden of proving “the application and scope of the asserted privilege to the court upon in camera inspection.”
But Nelson did not specifically challenge any of the city’s or the MMIA’s privilege claims, the opinion said; he “simply presented a blanket challenge, insisting that no documents could be withheld on privilege grounds consistent with” the state constitution.
The District Court “appropriately recognized” that Nelson’s position would render “the attorney client privilege [and attorney-work-product privilege] meaningless,” Baker wrote, and Judge Moses was right in dismissing the petition.
McKinnon, in her “specially concurring” statement, said Baker’s opinion “contains inconsistent statements and rules of law” and “distorted interpretations of the 1972 Convention proceedings.” The result, she said, was that public documents could now be placed “automatically beyond the purview of a court and citizens whenever the document is created out of the government’s relationship with its counsel.”
The Supreme Court, she said, “for the first time in our history interpreting this constitutional provision, applies a statutory privilege available generally to any litigant to keep public documents confidential. The Court does so without proper regard for the constitutional right to know or adequate consideration that the litigant here is not just any litigant, but a public body.”
McKinnon said it is necessary to distinguish between attorney-client privileges and attorney-work-product privileges.
“An attorney, in working through a case, creates her own documents, makes her own notations, and organizes her own files in a particular manner consistent with her strategies specific to that case,” McKinnon wrote, which constitutes the work-product. “The work-product is not a document of a public body, as the attorney, not the client, created the work-product.”
But attorney-client privilege, she said, is something different and is “necessarily narrow, protecting only ‘disclosures — necessary to obtain informed legal advice — which might not have been made absent the privilege.’”
She said she considers the right to know a “fundamental constitutional right that may sometimes demand public disclosure of attorney-client privileged documents.” But the court in this case “completely excludes the privileged, public documents from Article II, Section 9, scrutiny.”
This is where she brings up the Trump case, pointing out that Stephanie Clifford, a.k.a. “Stormy Daniels,” received $130,000 “from a shell company in Delaware; a company set up by Trump’s lawyer, Michael Cohen, for the sole purpose of passing the payment to Daniels.”
“Because Cohen is Trump’s attorney,” she continued, “the attorney-client privilege likely protects most of the information regarding Trump’s potential involvement. Under the Court’s decision, if a similar matter was at issue in Montana, the public would be excluded from requesting any information regarding the monetary exchange.”
McKinnon said she concurred with the opinion because “Nelson’s blanket challenge to MMIA and the City’s claim of privilege is insufficient to compel disclosure of the documents,” but the court was wrong in ruling so broadly. She said the “appropriate approach is to balance the public’s right to know with the weighty and compelling attorney-client privilege to determine whether,” in each particular case, “the merits of public disclosure exceed the privilege’s protections.”
Nelson said Friday that he pursued the case for precisely that reason — that he thought the public right to know outweighed everything else.
“That’s why I brought this,” he said. “I thought it was unique enough.”